January 12, 2018
Softwood Duties Could Cost U.S. Jobs
The U.S. administration’s duties on softwood lumber may end up doing more harm than good to the U.S. economy, says an economist at the National Association of Home Builders (NAHB). Stephen Melman, director, economic services, says while the duties are intended to preserve jobs at U.S. lumber producers, they will cost more jobs in the U.S. home building industry. The problems with getting softwood lumber have increased the construction cost of a new American home by $1,300, says Melman. “That $1,300 translates into an affordability issue because for every $1,000 increase in the price of a medium-priced home, about 150,000 American households are priced out of homeownership. That is a real problem that affects affordability and jobs because every new home that is built generates three full-time jobs over the course of a year. Take that away and you’ve lost those jobs.” See the interview at Job Losses
Quebec Specialty Store Joins Castle
Murexpair Inc. has joined Castle Building Centres Group Ltd. The Sherbrooke, QC-based retailer has been serving the local community for 17 years. Owner Jonathan Sirois and partner Bruno Langlois wanted to grow their business by having access to additional products, but didn’t want to lose their independence or compromise the core of their business, so they chose Castle. As part of the group, the specialty store will now offer a wider range of steel roofing, siding, decking products, and commercial designer steel siding.
Condominiums Lead Montreal Residential Sales
A total of 2,781 residential sales were made in the Montreal Census Metropolitan Area (CMA) in December, a 10 per cent increase compared to December 2016, says the Greater Montreal Real Estate Board (GMREB). This was the most active month of December since 2009. Four of the six main areas of the Montreal CMA registered increases. Laval, the Island of Montreal, and the South Shore had strong sales at 20, 15, and 15 per cent respectively. The area of Saint-Jean-sur-Richelieu posted a more timid increase of five per cent. The North Shore and Vaudreuil-Soulanges registered a decrease in sales of four per cent and 10 per cent respectively. Condominium sales jumped by 35 per cent, while plexes increased by five per cent and single-family homes fell slightly by one per cent.
Dodge Momentum Index Ends Year On High Note
The ‘Dodge Momentum Index’ grew 3.6 per cent in December to 153.9 from the revised November reading of 148.6. The index is a monthly measure of the first (or initial) report for non-residential building projects in planning, which have been shown to lead construction spending for non-residential buildings in the U.S. by a full year. December’s increase was due to an 8.6 per cent jump in the institutional component of the index, while the commercial component eked out a 0.7 per cent gain. For the full year 2017, the index averaged 132.3, up 10.7 per cent from the full year average for 2016, with similar improvement for the commercial sector (up 11.4 per cent) and the institutional sector (up 9.7 per cent). After retreating during the third quarter of 2017, the index regained its upward track in the fourth quarter, which enabled December’s reading to be up 20.9 per cent compared to the same month a year ago. The continued strengthening suggests that non-residential building construction activity will advance further during 2018.
Masco Makes Acquisitions
Masco Corporation has signed an agreement to acquire the L.D. Kichler Co., a developer of decorative residential and light commercial lighting products, ceiling fans, and LED lighting systems across both consumer and professional distribution channels. The acquisition will expand Masco’s reach into the residential lighting industry and complement its current product offering. Kichler will become part of the company’s decorative architectural products segment. The transaction is expected to close in the first quarter of 2018. Masco also acquired Mercury Plastics, Inc., a manufacturer of water handling systems for appliance and faucet applications and other plumbing products. This company is now part of Masco’s plumbing products segment.
January 11, 2018
Building Permits Values Decline
The value of building permits issued by Canadian municipalities declined 7.7 per cent to $7.7 billion in November, the first decrease in three months, says Statistics Canada. Nationally, the value of permits for all building components declined, with the exception of single-family dwellings. The value of building permits for non-residential structures fell 12.3 per cent to $2.9 billion in November, following two monthly increases. As of November, Canadian municipalities had issued over $100 million more in building permits in 2017 compared to the 2016 total, led by higher construction intentions for universities, hospitals, and manufacturing plants. The value of permits for single-family dwellings remained at $2.6 billion in November. After falling from a peak of $2.9 billion in October 2016, the value of permits for single-family dwellings remained steady at approximately $2.6 billion throughout 2017. Ontario led the gains, but they were offset by slight declines in Alberta and Quebec.
Report Offers Ways To Improve Return Policies
There is a way for retailers to ‘win’ the battle for returns policy approval without losing out on revenue, says Promocodes.com. It its report, ‘(Re)turning Point,’ it suggests a few ways to keep shoppers honest while also providing convenience that leads consumers to visit stores year-round. Firstly, it recommends retailers create a rewards program and encourage frequent shoppers (or frequent receipt-misplacers) to join. Include purchase history in the database so members can return even if they do not have the paper receipt. Another idea is to expand the return timeframe. Consumers don’t like the idea of a gift recipient being stuck with an item due to a bad return policy. This can prevent congestion in customer service lines, especially during peak periods like Christmas. As well, the report suggests to not saddle customers with store credit. The short-term impact on a retailer’s bottom line may be great, but long term it will cost them business. Make it easy for customers to return an item by providing free return shipping or, at the very least, the option to return any item purchased online in store.
Canadian Tire To Take Over Sears DC
CT REIT has entered into a 10-year lease with Canadian Tire Corporation (CTC) for the Sears distribution centre (DC) lease in Calgary, AB. The DC is comprised of two adjacent properties – a 625,000-square-foot DC and a 30,000-square-foot building ‒ on six acres of land building. CTC currently leases a different building in Calgary and will move existing operations to the new building in May.
CPG Changes Name To AZEK
CPG International LLC has changed its name to the AZEK Company to reflect its growing share of the expanding residential and commercial building products market. The rebranding is part of the organization's strategy to expand its pipeline in the wood deck and railing markets by offering premium and diversified products. The company growth includes expanding its footprint with regional sales associates across Canada and the U.S. The company puts a strong focus on reusing recycled plastics and turning them into residential and commercial building products that outlast wood and other raw materials. It has three divisions – AZEK Building Products, Scranton Products, and Vycom.
Home Hardware Pro Show Comes To Peterborough
Home Hardware Stores Limited will welcome contractors, renovators, builders, and tradespeople at its ‘Annual PRO Show’ at the Peterborough Memorial Centre on January 15. The series stops in six cities across Canada, providing attendees the opportunity to network with peers, learn about new products and trends, meet industry experts, and receive hands-on demonstrations. Attendance is by invitation only.
January 10, 2018
December Housing Starts Trend Stable
The trend in housing starts was 226,777 units in December 2017, compared to 226,178 units in November 2017, says the Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts. Despite the variation in activity across the country, the national trend in housing starts held steady at its highest level since 2008 while total urban housing starts in 2017 were up 6.2 per cent compared to 2016 due to the rise in apartment construction. Total housing starts in the Vancouver, BC, census metropolitan area (CMA) increased in December 2017 compared to the previous month after posting one of the highest levels of monthly multi-family starts for the year. Total starts in the Ottawa, ON, CMA were at their highest level since 2009 for the month of December, driven mainly by purpose-built rental apartment starts. In the Toronto, ON, CMA, the pace of new home construction remained virtually unchanged in 2017. Close to 39,000 homes broke ground this year, down 0.7 per cent from 2016. The Montreal, QC, CMA ended the year with 24,756 housing starts ‒ a high level compared to recent years.
Quebec Chain Adopts RONA Banner
Quebec-based Marcil Stores will be converted to the RONA banner at the end of February. Seventeen stores in all will convert to the Lowe’s Canada ‘proximity store’ banner. “We are committed to RONA and the proximity building centre model as one of Lowe’s Canada’s pillar of growth,” says Serge Éthier, executive vice-president of RONA Proximity. “RONA and Marcil operate in the same market segment, have complementary locations, and both serve a large client base of contractors and pros. It was, therefore, natural to combine the strengths of both banners.” The product selection at the stores will double to more than 40,000 SKUs in-store and on the RONA website. There will also be new product categories such as home appliances and a wide seasonal department.
Retailers Adopting QR Technology
Mobile QR code coupon redemptions are forecast to surge, surpassing 5.3 billion by 2022, says a study by Juniper Research. This is up from an estimated 1.3 billion in 2017, driven by QR reader integration on mobile devices. The lack of QR code reading facilities was originally the major barrier for use of QR codes in western markets. However, Juniper believes retailers are set to take advantage of an increasing receptive audience. It says U.S. retailer Target now has a QR code-based payments system to scan offers directly to a device-stored payment card, which can then be scanned at checkout for instant payment. The digitalization of offers along with other innovative technologies will likely double mobile-enabled loyalty cards as well.
Ministry Offers New ESA Poster
In light of the changes to the Employment Standards Act, 2000 (ESA) brought about by Bill 148, the ‘Fair Workplaces, Better Jobs Act, 2017,’ the Ministry of Labour has published a revised version of the ESA poster (Version 7.0) which is required to be posted by employers in a conspicuous place in the workplace. The poster summarizes certain standards under the ESA and directs readers to the ministry’s website for more information. Bill 148 did not change an employer’s statutory obligations regarding the poster, which require an employer to post the most recent copy of the poster in a conspicuous place and provide a poster to each employee. For more information or to print the poster, click here
Strong Sales For WD-40
WD-40 Company had net sales of $97.6 million for the first quarter of 2018, a nine per cent increase over net sales in the first quarter of 2017. On a constant currency basis, total net sales for the first quarter increased eight per cent year over year. Net income for the quarter was $12.6 million, an increase of seven per cent from the prior year fiscal quarter. Gross margin was 55.5 per cent compared to 57.2 per cent a year ago. The company’s flagship product, WD-40 Multi-Use grew 10 per cent year over year and the WD-40 Specialist product line grew 29 per cent. Net sales of maintenance products, which are considered the primary growth focus for the company, increased 11 per cent in the first quarter when compared to the prior year fiscal quarter. Net sales of homecare and cleaning products decreased five per cent.
January 9, 2018
Fulfillment Can Drive Conversions
Poor fulfillment costs retailers, while good fulfillment can drive conversions, says a report by Arvato. More than half (54 per cent) of U.S. shoppers say they have abandoned a purchase online because delivery was too expensive. This is not surprising with 83 per cent of shoppers indicating that free delivery was the most important factor when it comes to fulfillment of online orders, followed by speed of delivery (53 per cent), and free returns (52 per cent). Nearly a quarter of shoppers have cancelled an order because of slow delivery speeds, while another quarter say the product was out of stock with no indication of when it would be available, so they went on to shop at another retailer. Fifty-six per cent of shoppers already use the ‘buy online and pick-up instore’ (BOPIS) option and 11 per cent use the two-hour BOPIS options offered by retailers. Arvato says delivery isn't just about fulfillment, but an integral part of the decision-making process for the online shopper. Retailers that are not offering a fast, convenient, and, crucially, free delivery service are at risk of losing customers and business.
Castle Gets Western Member
Timber Spirit Supply in Spiritwood, SK, has joined Castle Building Centres Group Ltd. The town of Spiritwood is located in central Saskatchewan, about 125 kilometres west of Prince Albert. Matt St. Onge founded the business just a few years ago with the goal of building trust with the local community as his guiding principle. He says he joined Castle because the group allows his business to maintain its independence and continue to serve his market with products that work. Timber Spirit Supply is a full-service lumber, building material, and hardware destination.
PPG To Acquire Dutch Paint Wholesaler
PPG plans to acquire ProCoatings, an architectural paint and coatings wholesaler located in The Netherlands. The company says the acquisition will strengthen its presence in this market where it has a deep and long history that dates back nearly 300 years.
Consumer Expectations Will Hurt Retailers
Changing consumer expectations and habits threaten to see even more Canadian retailers close in 2018, says Willy Kruh, global chairman, consumer and retail national leader, high growth markets Canada, with KPMG. “Retail is not in disruption, but is disrupted. Consumer behaviour is changing rapidly and many Canadian retailers are not keeping pace with the fact that consumers and their shopping habits are undergoing fundamental change.” He says the fundamental changes that are impacting domestic retailers have been somewhat masked by a robust economy and low interest rates. “With the economy expected to slow next year and interest rates already up twice this fall, consumers are going to be hard-pressed to keep on spending. Debt is at record levels and the Bank of Canada has made the cost of carrying that debt even higher. So as consumers feel the squeeze so will retailers ‒ especially those who need to do more to optimize the shopping experience.” Other “disrupting revolutions” that will impact retailers include the rise of the Millennial generation, technology, and population growth from immigration.
Spectrum Seeking Options For Businesses
Spectrum Brands Holdings, Inc. is exploring strategic options for its Global Batteries & Appliances (GBA) businesses with the intention to sell the units during 2018. The idea is to redeploy capital from GBA assets to reposition as a faster-growing and higher-margin company with an increased focus on its four main businesses – hardware and home improvement, global auto care, global pet supplies, and home and garden.
January 8, 2018
Retail Sales Maintain Momentum
The positive momentum in retail sales just keeps on rolling, says Ed Strapagiel, a retail consultant. Total Canadian location-based retail sales increased 7.5 per cent for the three months ending October over the year-ago period. Year-to-date retail sales are seven per cent ahead of last year after 10 months of 2017 and the underlying 12-month trend is also up seven per cent. Building material and garden equipment/supplies dealers had a particularly good year, with year-to-date sales up 13.2 per cent. Overall eCommerce sales were up 35.5 per cent for the first 10 months of 2017 year over year, a much higher gain than for retail in general. Bricks-and-mortar location-based retailers that also sell online had an estimated $6.6 billion in eCommerce sales.
Amazon Still Dominates eCommerce Sales
Last year, Amazon was responsible for an estimated 44 per cent of all U.S. eCommerce sales and fully four per cent of the country’s total retail sales (roughly $200 billion), says a report by One Click Retail. Consumer electronics, home and kitchen, publishing, and sports and outdoors were the top selling product groups in 2017 with an average of 9.5 per cent yearly growth. The retailer made some major upgrades to its automated marketing system during the year as well, giving an increased level of sophistication that allows brands to bid on a far broader range of keywords, targeting mobile, desktop, and/or app users, and even integrate with eMail marketing and vendor-powered coupons. Consumables and private brands had strong growth with an increase of 35 per cent year over year. The company’s voice-activated personal assistant, Alexa, has helped the company increase sales in home automation. The report says, “Every major trend across 2017 can be explained by the fact that more of Amazon's core demographic (Millennials) are growing up: they're increasingly owning homes, raising children, and buying a ton of stuff to go with it. The bulk of the estimated $5.5 billion in home and kitchen sales comes from young people – those who shop from Amazon the most – investing in their homes and in their families.”
Ace Hardware Could Partner With Kroger
Ace Hardware is reportedly considering a partnership with the Kroger Company where mini-Ace locations or kiosks would pop up within Kroger locations. Kroger is a large U.S. retail chain with almost 3,000 locations in store formats that include supermarkets, superstores, department stores, and convenience stores. Ace Hardware has been dabbling in smaller format and ‘store-within-a-store’ formats since 2012. While it has mini stores within retail partner stores, it has also partnered with other retailers to house their mini-stores. In 2016, Sears Hometown and Outlet Stores, Inc. opened a location inside an Ace Hardware store in California. If the Ace partnership with Kroger goes through, the grocer would be Ace’s biggest partnership to date.
Old Flooring New Again For 2018
The new year is all about paying homage to yesteryear, at least on the floors, says SMART Carpet and Flooring. Its top hardwood trends for 2018 show the most modern homes will feature some vintage and retro looks. The looks include wide plank floors that are five and even seven inches wide which will make spaces look larger. Distressed floors are also on trend, whether they are eco-friendly reclaimed wood or budget-friendly wood-look vinyl plank. The trend in varied-width wood plank started to gain speed toward the end of 2017 and will continue to gain speed this year. Finally, parquet floors are back. This time around, parquet will be paired with other flooring trends like cool grey, distressed, or wide plank flooring to create a modern take on the traditional style.
Steady Demand For Windows, Doors
Global windows and doors demand is projected to advance 4.5 per cent per year to $214 billion in 2021, says the Freedonia Group. New residential construction accounted for the largest share of windows and doors demand in 2016 and will continue to do so going forward, totaling 35 per cent of the market in 2021. In terms of window products, plastic will account for the largest share of overall sales growth in value terms in 2021. The cost and performance advantages of PVC products, especially in developing regions where market penetration has not advanced as far as in higher income areas, will spur this growth.